Phase 3b Public Sector Decarbonisation Scheme

Phase 3b of the Public Sector Decarbonisation Scheme provided grants for public sector bodies to fund heat decarbonisation and energy efficiency measures. These grants were for capital works. Phase 3b allocated up to £635m of funding to public sector organisations, which was spent in the financial years 2023/24 and 2024/25.

The grants were used to upgrade heating systems in public buildings to be cleaner, cheaper and powered by renewable energy. Following Phase 3a of the scheme some criteria changes were made to sharpen the scheme focus on cost effective decarbonisation of heat and the overall achievement of carbon emission savings. 

Phase 3 of the Public Sector Decarbonisation Scheme was launched by Salix on behalf of the Department for Energy Security and Net Zero (formerly the Department for Business, Energy and Industrial Strategy) in 2021. Phase 3b Public Sector Decarbonisation Scheme is the second round of this scheme. 
 
Client feedback from the previous phases was carefully considered and refinements were implemented to reflect stakeholder feedback regarding the proportion of funding made available for financing projects that deliver over more than one financial year.   

Salix Finance delivers phase 3b of the Public Sector Decarbonisation Scheme on behalf of DESNZ.

The Department for Energy Security and Net Zero has published a summary report for Phase 3b Public Sector Decarbonisation Scheme.

The report highlights the policy drivers, scheme objectives, eligibility, timelines, and technologies as well as showcasing successful projects.

For Phase 3b, 560 applications were submitted with a combined value of over £1.48 billion. 231 projects were awarded funding being delivered by 183 public sector organisations.

Please see the link to gov.uk for the full report.

• Will help reduce fossil fuel emissions as well as making public buildings more comfortable and cheaper to warm.
• Allocation of up to £635m of funding to public sector organisations, to be spent in financial years 2023/24 and 2024/25. This is split by financial year, with up to £402m to be allocated for 2023/24 and up to £233m to be allocated for 2024/25.
• Applicants had the opportunity to submit separate applications for separate projects or combine several projects in a single application for a single year fund allocation or a multi-year fund allocation.
• Ongoing client and technical support on project delivery.